Gold: $1,177.59 -0.08
Silver: $17.19 -0.08
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October 7th Weekly Silver Market Update
Article By: Kyle Wanchalk on October 07th, 2016

Precious metals are doing well to close out the week, but on the whole will be reflecting on some pretty significant losses. There was a slew of US economic data made public this week as well as some commentary from the Federal Reserve. To make an otherwise long story short, it is safe to say that both gold and silver have seen better weeks. The simple fact of the matter is that we have seen some massive losses that today’s gains are not even coming close to counteracting.

US Economic Data Dealt

Being that this was the first full week of October trading, we were always going to be on the receiving end of a good bit of economic data. And that is exactly what unfolded over the course of the past 4 or 5 days. First was news relating to the services sector. For those who may be unaware, the services sector is the biggest for the US economy, and as such, any data coming from it will be deemed highly important by investors. Especially in light of all this talk surrounding interest rates and what might potentially be happening to them.

On Wednesday, we received some great services sector news in the form of the non-manufacturing PMI from the Institute for Supply Management. For comparison, August’s PMI came in at 51%. This is a nice, healthy number that suggests the services sector is growing, but is way too close to the 50% threshold that so many investors fear the index may fall below. For September, however, the picture was a much brighter one due to the non-manufacturing PMI hitting above 57%. This suggests that the services sector of the economy is very much growing and has a bright future.

Also made public on Wednesday was the ADP private-sector job growth report for September. According to the payrolls processor’s data, about 150,000 new private-sector jobs were created last month. Though this fell short of 170,000 estimates, analysts are being quoted as saying that the number of jobs being created is right on par with what you would expect from an economy with a booming employment sector. The overall unemployment rate is holding steady at 4.9% and, if anything, it looks as if it will move even lower before it will think about jumping forward. What’s more, an overall unemployment rate of 4.8% is consistent with “full employment,” so the US is doing quite well in that regard.

Non-Farms Data Misses the Mark

The highly anticipated non-farms data from the US Labor Department was what seemed to consume the minds of just about every type of investor. When it comes to whether or not interest rates are going to be hiked, the non-farms data plays a crucial role. If the data is overly positive, the market becomes convinced that rate hikes will be happening sooner rather than later. If it is overly negative, the feeling is that hikes might have to wait a little while.

When the Labor Department released its data, it mostly coincided with the private-sector jobs data released by ADP on Wednesday. Officially, about 156,000 non-farm jobs were added to the economy last month. This fell short of expectations that called for anywhere from 170,000 to 175,000 jobs to have been created. Even though we just mentioned how the positive private-sector jobs report was keeping the overall rate of unemployment below the 5% mark, today’s non-farms data miss took the unemployment rate up to an even 5%.
The one bright spot that can be taken away from today’s data is that hourly wages increased by 2.6% month on month. For the longest time, hourly wages have remained stagnant so it is finally great to see that the tide might be beginning to change.